Both the S&P and Dow fell on Thursday largely due to bounce in the US dollar , which surged to 3-month highs.
The traders were closely watching moves in the greenback. It appears big investors are starting to wind up short positions into the end of the year; a more upbeat tone from the Federal Reserve supports the idea that higher interest rates may be on the horizon.
In addition, the Fast Money traders were also closely watching the action in bank stocks after Citigroup’s secondary got a cool reception from the Street.
Also BofA landed on the trader radar, after the company said it had tapped insider Brian Moynihan as its next chief executive, ending months of speculation about who would succeed Kenneth Lewis to lead the largest U.S. bank.
What should you be watching?
Instant Insights with the Fast Money Traders
I’m tracking the Dollar ETF, says Pete Najarian. I’m seeing unusual options action into March, which suggests at least some big investors are betting on an upside move for months to come.
I'm watching the Dollar Index, says Tim Seymour. At $77.50 it broke above a critical technical level but I still believe the long term trend is lower. I’m now watching 81.25 on the Dixie. If the dollar trades above that level I’d establish a new position in commodities as a long term weak dollar bet.
Looking at the market broadly, it seems to me stocks are range bound, says Jeff Tomasulo of SMB. I’d sell the top of the range around 112 in the SPY and buy the bottom around 109.
I’m also watching the action in Goldman, Tomasulo adds. Last week when the market was rallying Goldman and other financials didn’t participate. I’m bullish on Goldman technically, but I’d only nibble at $160 with a stop under $157.
When it comes to bank stocks, I like BofA right here, adds JJ Kinahan of TD Ameritrade. And if Citi breaks below $3.15 I’d think the stock is in trouble.
I see Citi as a call option, adds Pete Najarian. Citi near $3 looks interesting but only if you have a longer-term timeline. If you’re looking out the next few years I think we could see a double out of Citi – and a double out of BofA, too!
TAKE YOUR POSITION: RIMM, PALM & ORACLE
Technology will likely dominate Friday’s trading with earnings from both RIM and Palm due after the bell.
How should you game it?
RIM'S Earnings Reaction
% Change from 2-days before to 1-day following report
Options action suggests RIM could move 8% in either direction, explains Pete Najarian.
I’m watching $65 in RIM as an important level, says Jeff Tomasulo. If it stays above 65 after earnings technicals suggests it could move to $70.
I’m seeing a lot of buyers of January 10 puts in Palm, adds JJ Kinahan.
FAST & FURIOUS: THE KEY QUESTIONS INTO THE CLOSE
BUY NKE? With Nike set to report earnings after the bell, should you buy?
I’m a buyer, says Pete Najarian.
BUY AMZN? Citi raised its price target on Amazon to $170; should you buy?
I’m a buyer, says JJ Kinahan, but I’d play it with options.
BUY OIL?Oil traded marginally lower on the session as the dollar rallied; is this a buying opportunity?
I like nat gas better, says Eugene Profit.
BUY GS?Goldman Sachs traded to the downside today; is this a buying opportunity?
I’m a cautious buyer around $160, says Jeff Tomasulo.
TRADE TO GO: STORAGE PLAY
Pete Najarian suggests putting Seagate on your radar. It’s been strong in a strong tape and strong in a weak tape. I think it’s a great stock.
CALL THE CLOSE
Pete Najarian : I don’t like this market right now. I’m not either a buyer or seller
JJ Kinahan : I’m a buyer into expiration
Eugene Profit : I’m a seller
Jeff Tomasulo: The market seems range bound. I’d sell the top of the range around 112 in the SPY and buying the bottom around 109.
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Trader disclosure: On December 17th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Seymour Owns (AAPL), (BAC), (FXI), (INTC), (TSO), (GE), (EEM); Finerman's Firm Owns (MSFT), (NOK), (AAPL); Finerman's Firm Owns (BAC) Preferred, (BAC), (BAC) Call Spreads; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (UNG); Najarian Owns (ORCL) Jan. Calls, Is Short (ORCL) Dec. Calls; Najarian Owns (AAPL) Calls; Najarian Owns (FCX) Call Spread; Najarian Owns (GE) Calls; Najarian Owns (MS); Najarian Owns (RIMM) Jan. Calls, Is Short (RIMM) Dec. Calls; Najarian Owns (UUP) Call Spread
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